TOKYO – Oil prices climbed in early trade on Tuesday as investors took advantage of the previous day’s losses to cover short positions, although concerns persisted over economic headwinds from tariffs and US monetary policy that could dampen fuel demand.
Brent crude futures rose 51 cents, or 0.8 percent, to $66.77 a barrel, while US West Texas Intermediate crude was at $63.59 a barrel, up 51 cents, 0.8 percent.
Both benchmarks dropped more than 2 percent on Monday on signs of progress in nuclear deal talks between the US and Iran, helping ease supply concerns.
“Some short-covering emerged after the Monday’s sharp sell-off,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
“However, concerns about a potential recession driven by the tariff war persist,” he said, predicting that WTI will likely trade in the $55–$65 range for the time being amid ongoing uncertainty related to tariffs.
On Monday, US President Donald Trump repeated his criticism of Federal Reserve Chair Jerome Powell and said the US economy could slow unless interest rates were lowered immediately.
His comments about Powell fuelled worries about the Fed’s independence in setting monetary policy and about the outlook for US assets. Major US stock indexes dropped and the dollar index slid to a three-year low on Monday.
